The Ghana cedi is expected to remain stable this week in anticipation of a much-needed foreign exchange buffer in the near term on the back of the sizable inflows.
This follows the Government of Ghana’s receipt of a $103 million indicative operations project grant from the African Development Bank last week.
Additionally, the International Development Association arm of the World Bank approved a $250 million loan to support Ghana’s financial stability fund.
All these boosted the foreign exchange supply in the market last week.
The cedi ended the week on May 28 trading at a mid-rate of GH¢14.90 to a dollar.
Measures announced by the Bank of Ghana during the May 2023 Monetary Policy Committee (MPC) meeting have also been tipped to help stabilise the cedi.
BoG said that it possesses sufficient foreign exchange reserves to support the market.
The apex bank also advised economic agents to refrain from speculative purchases, warning that they would incur economic losses when the market corrects itself.
“The Bank of Ghana remains fully committed to providing stability in the exchange rate for the cedi. The bank has enough foreign exchange reserves to support the market, and economic agents should stop engaging in speculative purchases as they will suffer economic losses when the correction occurs,” the BoG stated.
Currency and financial analysts believe the BoG’s initiative will reduce the strain on the local unit while the expected inflows enhance their spot market intervention capacity.
Last week, the cedi remained stable after the central bank announced some measures to stabilise it during the May 2023 MPC meeting.
The cedi remained stable for the rest of the week’s trades after shedding 1.17% week-on-week and 2.82% week-on-week vs the dollar and the pound on May 28, 2024.
Also, the local unit gained 0.78% week-on-week vs the euro.
The Ghana cedi continued to lose ground to the major trading currencies for the past weeks, especially the US dollar.
Businesses expressed their frustration over the current state of the cedi.
The cedi was trading against the dollar at GH₵ 11.98 on Monday, May 20.
However, it crossed GH₵ 15.24 at the close of business on May 16 at the forex bureaus, now trading at GH₵ 14.85, resulting in a depreciation rate of close to 20% since the beginning of the year.
Story By Will Agyapong
